How do make a profit from a build

its because they can afford to buy in bulk quantities

so can negotiate a much lower price than you can

This may or may not apply:

1. People trust popular vendors more than a random person.

2. You pay more because you buy products from third-party vendors. The original price of all components are much less than prices you see in Best Buy, Amazon, Newegg, etc. The reason for this is because those third-party vendors have to buy it from somewhere. With shipping costs + profit, they up the price. But neither of those vendors buy it directly all parts directly from nvidia, amd, etc. so there are more vendors in between. So those vendors are the ones buying it from nvidia, amd, etc. and sell it for more (naturally) for profit. So when all those steps finally hit Amazon, Best Buy, or Newegg, the prices are already far more than they originally were. And original buyers buy in bulk for cheaper prices.

3. Maybe your build isn't good. Your average consumers knows very little to nothing about computers. They don't care what parts you put in there. They want results. So if you bought a 1TB HDD for $100 instead of one for $50, then too bad. They don't care.

Maybe you priced it higher than it should be. Just because you have more expensive parts, it doesn't mean yours will work significantly better, or even better at all. I can't speak about the guy you mentioned directly because I neither know him nor do I know what you say is true. A better question that you need to ask yourself is what is your customer base?

similar is no good

you need to compare exactly the same

Forget the price, I wouldn't buy that build. It's only good for basic usage. No gaming -- too weak. And the SSD is a waste to most people. Again, your customer base! Most people don't know what a SSD is, let alone know how to manage it and use it properly.

where do you plan to sell them?

how many units are you talking about?

doing it as a living or just to make a bit of money?

to order or what?

and as ksham said--i wouldnt even look at that pc

thats the sort of thing i let the grandkids muck about with for internet and paint

edit--also you are buying parts from different places--do they all give free postage?

if not thats putting up your costs

the parts are what i would class as low budget--thats what makes it weak--i know that keeps the cost down

and take out the 40gb ssd

online auctions have fees so that cuts your profit or means you need to sell at a higher price

also how would you deal with warranty if something failed?

should point out that not trying to knock you or put you down

just pointing out the practicalities

quite honestly if you have some pc knowledge its easier to pick up a few bucks fixing peoples pcs than building them

or buying anti virus software in bulk and reselling them

The biggest problems for you is what kind of warranty and tech support you can offer.

I run a computer shop and you simply cannot compete with pricing from the big stores (pre-builts - Walmart, Best Buy, online parts - Newegg, Amazon, etc). Even through my vendors, I usually don't save more than a few dollars on most hardware compared to Newegg or Amazon. However, when I order from them, I usually need to place an order of $800 - $1,000 in order to get free shipping. So I can't just order a few parts from one of my vendors as purchasing that same few items from Amazon or Newegg will likely be cheaper once shipping is factored in.

Remember, all the pre-builts are made in China. Labor is cheap and parts are bought by the truckload so they are heavily discounted as well. You will never be able to offer the same hardware at the same price as them, especially on the low end ($500 or less). You have to offer something they can't.

People always come in and ask why should they buy a computer from me vs going to Walmart or Best Buy. I tell them I support what I sell. If they ever need help with something or have an issue come up, I will be there to help them. Either by going out to their house, remoting into their system or walking them through something on the phone. I will have someone there to help them. Our "low end" system is built with the same or similar performing specs they would find at a big store but with quality components and a build quality that exceeds anything they can purchase without going to a boutique builder (Alienware *sort of*, Falcon, Origin, Ibuypower *shudders - they should rename to ibuycrap* etc.) and spending a good bit more money.

The real money comes from support. People always need work done on computers. Whether it's removing virus/spyware/crapware/malware to optimizing a system, transferring data or just simply reinstalling an OS. People always need that kind of stuff done. More than what you would think. Most people that buy a computer from us also have us service it. Repeat business is usually good business.

Just as an example on making money between building systems or working on them. We make less than $100 in profit on most builds and have on average about 6 new builds a month. If we stopped building new systems and it had no other affect on the business, it would be less than 6% of our total income. Now, I don't run a huge business and we aren't in a heavily populated area (population for the entire county is less than 22,000) but we would do well and stay busy just servicing personal/business computers and setting up and maintaining networks.

The service side is where the money is at.

PROFIT:
You need to focus on Gaming or Media PC's that cost more than $1000, but realistically unless you have access to a LOCAL store with good prices, shipping alone will eat up your profits.

If you still wish to consider it, my advice is start small and offer to BUILD a PC rather than pre-building PC's. Then, take the money, go to the local store, get all your parts, build it and have it ready in a few days.

You're going to have to focus your efforts on buying parts that are relatively RELIABLE but not too expensive. For example, a good $100 Asrock motherboard not a $230 one that's only slightly better.

POWER SUPPLIES are something you have to research very carefully as well.

If you can manage to make a small profit or even just break-even you would then ramp up a little and investigate:
a) Small Business deductions
b) Buying parts in bulk

*Future of Gaming PC's:
While the future of gaming PC's is still bright, I believe that building PC's will disappear completely in a few years. One concept in the works is an EXTERNAL BRICK PC which is similar to an external Graphics Card, but has the CPU, GPU, and Shared RAM on the same board (basically like a PS4 with no BluRay drive).

So you'd have a tiny, efficient PC then upgrading simply involves buying a new brick. This might sound too expensive but it won't be; there are many advantages (can share between PC's, CPU/GPU/RAM is optimized for each other etc...). It will basically plug in like a USB hard drive. When you start a game, it would simply copy the game data to the Shared RAM on the external box and run it as a 2nd computer. Unlike only an external graphics card, the bandwidth issues are minimal (and external PCIe or Thunderbolt are other options).

We WILL go this way eventually then building PC's will disappear completely. I'd say five years at the most to get there...

The truly incredible thing is the benchmarks would be IDENTICAL for every "brick" PC regardless of the host PC. Even a netbook would be fine. Microsoft would have to add Windows support though, so by the time this come out it would likely be a Windows 8 minimum requirement.

(And RESELL on these devices would be good too. Spend $800 for high-end device and sell the old one for at least half that.)